It is not currently known whether induction-which occurs when one embryonic cell group influences gene expression and differentiation in another, plays a role in the development of major regions and pathways in the mammalian forebrain. A clear understanding of induction in the forebrain is crucial since the molecular signaling pathways that underlie this process may be disrupted by environmental toxins, genetic mutations, dietary agents, pharmaceuticals, and drugs of abuse. This proposal will evaluate the hypothesis that induction between the frontonasal mesenchyme, the surface epithelium of the embryonic head, and the forebrain neuroepithelium underlies morphogenesis and differentiation of an entire functional subdivision of the forebrain-the olfactory bulb- as well as its major source of innervation-the olfactory epithelium. The investigator will determine whether interactions between the mesenchyme and the adjacent forebrain or surface epithelia are necessary for patterned gene expression and neuronal differentiation in the presumptive olfactory epithelium and forebrain. The contributions of four established inductive signaling molecules will be assessed. Retinoic Acid (RA), sonic hedgehog (shh), Fibroblast Growth Factor 8 (FGF8) and Bone Morphogenetic Protein 4 (BMP4) are all found in discrete cell populations in or around the forebrain, surface epithelium and mesenchyme. The investigator will analyze whether the presumptive olfactory epithelium or frontonasal mesenchyme provide unique signals to initiate morphogenesis and differentiation of olfactory structures. Finally, he will evaluate the extent to which inductive interactions influence the initial patterning of axonal projections between the olfactory epithelium and the forebrain. These experiments will therefore define a cellular and molecular basis for induction during regional and pathway development in the mammalian forebrain. The results will identify a major point of vulnerability of the developing forebrain to a range of environmental toxins, pharmacological agents, and genetic diseases. Such disruptions of early induction during forebrain development may ultimately compromise the unique behavioral and cognitive functions that are the province of distinct forebrain regions and circuits.